Tesla Model 3s are showing up in stores nationwide as the company fires back at new reports of production issues

More Tesla Model 3s are rolling into Tesla retail stores nationwide, but lingering production issues are hampering the company.

A CNBC report published Thursday alleged that part of the Model 3’s battery was being assembled by hand as recently as mid-December.

Customer deliveries are underway, but the “production hell” that CEO Elon Musk previously warned about is having a real impact.

Tesla missed its production targets in Q3 and Q4 2017, and cut its projections in half for the first quarter of 2018.

Tesla Model 3s are still rolling into the company’s retail stores nationwide even as Tesla deals with the fallout from new reports about production challenges at its Gigafactory battery plan in Nevada.

Model 3s began showing up at Tesla stores in Texas and Arizona among other places this week. The company brought the entry level luxury electric car to its showroom for the first time in Los Angeles and Palo Alto earlier this month.

A CNBC report published Thursday cited current and former Tesla employees who alleged that part of the Model 3’s batteries were being assembled by hand as recently as mid-December because of ongoing issues at the Gigafactory. A Tesla spokesperson called the claims “extremely misinformed and misleading” in an email to Business Insider.

Customer deliveries of the Model 3 have begun, but the “production hell” that CEO Elon Musk previously warned about is having a real impact.

Tesla missed its production targets in Q3 and Q4 2017, and cut its projections in half for the first quarter of 2018. The company had said last year that it expected to make 20,000 Model 3s per month by December 2017.

The Model 3 is Tesla’s first offering in the entry level luxury segment.

Despite the production challenges, Tesla set a sales record for 2017, delivering 101,312 Model S and Model X vehicles alone during the year. It was the first time Tesla crossed the 100,000-vehicles-sold benchmark in 14 years.